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Riverside County
Finance
Sponsorship Guidelines | Insurance | Mismanagement of Funds | Workers' Comp Changes
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Click here to download a Mileage Reimbursement Form in PDF format.
Print this page, fill it out and fax to 23rd District PTA at 951-826-6951, or mail to Rhonda Torres.
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Click here to download a Mileage Reimbursement Form in Excel Format.
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(Click here to go to printable pdf version of article)
The law permits a nonprofit organization such as PTA, without payment of income taxes and without risking loss of tax exemption, to both:
Engage in sales activities if any of four conditions are met with respect to such sales activity.
Receive corporate sponsorships.
FOUR CONDITIONS TO AVOID UNRELATED BUSINESS INCOME TAXATION (UBIT):
1. Sell donated merchandise
2. Substantially all help is donated
3. Activity is not a "regularly carried on trade or business"
4. In furtherance of PTA's exempt purpose .
Some items fall in more than one category, such as Girl Scout cookie sales, which fall into three of the four categories.
Girl Scouts cookie sales are conducted with substantially all volunteer help (#2 above)
If the event is held only once per year it is probably not a "regularly carried on trade or business." Exception - Christmas Cards or Christmas Trees. (#3 above)
The Girl Scouts maintain that their cookie sales are a "prop" to help carry out their charitable mission for which they were organized. It is part of their program to help girls mature. (#4 above)
Gives the girls confidence.
Teaches sales skills.
Teaches how to count money.
PTA & QUALIFIED CORPORATE SPONSORSHIPS
Corporate sponsorship is a means of funding in which a corporation provides cash, products, or know-how to a charitable or educational organization in return for acknowledgement of thanks. The acknowledgement of thanks generally takes the form of public recognition for the sponsor's support. Sponsorships are an appropriate means of funding projects and programs that promote the objectives of an organization. Certain guideline must be followed to ensure that the PTA's Noncommercial policy is adhered to.
ACCEPTABLE–Acknowledgements – It is acceptable to include the transmission or display of a sponsor's logos and slogans that do not contain comparative or qualitative description of its products and services. It may include sponsor locations, telephone numbers, and value-neutral description of a sponsor's product line or services.
UNACCEPTABLE - Acknowledgements that include advertising (Endorsements) - To the extent that the acknowledgement exceeds mere identification and, instead, promotes the sponsor's product or services, the recognition may instead be treated as advertising rather than acknowledgement. Price information would generally be treated as advertising rather than acknowledgement. Any inducements to buy, sell, rent, or lease a sponsor's product or service would likewise be treated as advertising rather than donor acknowledgement.
FOLLOWING PTA'S NONCOMMERCIAL POLICY
Do not make a qualitative judgment on the sponsor's products or services.
Do not include comparative language or language that implies good quality in the acknowledgement.
Do not permit the sponsor to write the acknowledgement of thanks.
Do not ask your members or the public to buy the products or services of the sponsor.
Do not advertise a product or service.
Do not endorse a product or service.
PERMISSIBLE ACTIVITIES
Give the corporate sponsor an acknowledgement of thanks in return for the donation.
Identify the sponsor's name, a picture of their product, an address, phone number, Web page.
Include the logo or slogan of the sponsor, for example: "Ford, Where Quality is Job One" or "Ford, Makers of Lincoln Mark VII".
Provide free product samples. For example, it is acceptable to have a banner which states, "Pepsi: Valued sponsor of the California State PTA Convention - free samples at booth 56".
PROHIBITED ACTIVITIES
Do not include any comparative statements such as, "MCI is better that AT&T!" or "Chevy: Best Car in America!"
Do not call for someone to purchase a product. For example, "List your home with Century 21 today!" or "Bank of America: Open an account today!"
Do not hang a banner that states, "PTA hates Coca-Cola and loves Pepsi."
SPECIFIC SPONSORSHIP CONTRACT ISSUES
ROYALTY Percent of Gross Sales
PARTNERSHIP Percent of Net Profit
Under new regulations, it is acceptable for PTA to agree to an exclusive sponsorship. An exclusive agreement is one that prohibits competitors of the sponsor from selling at the event. The portion of the payment that reflects the exclusion element is taxable.
It is acceptable for PTA to receive payments structured as royalties. Royalties are a percentage of gross total sales, regardless of whether the person paying the royalty makes a profit or a loss. The royalty is paid for use of the PTA name and logo.
It is NOT acceptable for PTA to enter into a partnership (share of NET PROFITS) of a business.
The PTA may provide a hypertext link from the PTA's Web site to the sponsor's Web site. But PTA must be seen to be "passively" allowing its name and logo to be used. PTA may not be too actively involved in soliciting traffic to the site.
The PTA may not be characterized as endorsing the products offered on the site. This not only violates PTA noncommercial policy, but also may result in Unrelated Business Income Tax (UBIT).
Additional information regarding PTA Fund-raising, Sponsorships and PTA's Noncommercial Policy can be found in Section 59 of the Finance Section of the California State PTA Toolkit. Information on the Noncommercial Policy is also located in the Bylaws for Local PTA/PTSA Units, Article III, a & b.
Knowledge is Power and Protection
PTA Insurance information will be coming soon. It comes every year and can not be avoided. In fact it is mandatory and a stipulation of being a unit in good standing.
“Participation in the California State PTA insurance program is required for all PTA districts, councils and units. The California State PTA arranges coverage; districts are notified of the cost for insurance in the fall. Premium costs vary depending on state wide losses during the previous years.” (California State PTA Toolkit)
Unit premiums this year are $200 per unit (school site), plus an extra 5% for Workman’s Compensation of any wages paid over $1,000. Council premiums are $120 per council, plus the extra 5% if applicable. When the insurance packet is received, please remit completed forms along with premium payments through channels in a timely manner (by the given due date).
Another key element of your insurance is the Insurance and Loss Prevention Guide. The hardcopy of the guide is mailed to all units, councils, and districts annually in the Fall Service Mailing from CSPTA—due out this month. An electronic version of the insurance guide was included on the CD in the Summer Service Mailing. Always consult this guide when planning any PTA activities. It tells you which activities are covered and which are not. You cannot proceed with activities that are not covered by insurance without assuming liability! If you have questions contact the insurance directly, it is a service for which you have paid.
MISMANAGEMENT OF FUNDS/EMBEZZLEMENT
By Barbara Carnesecca, 2003-05 Treasurer
Mismanagement of funds refers to the potential loss of PTA funds and raises questions about the integrity of the individual(s) in charge of the PTA funds.
There are several signs of possible mismanagement: Lack of receipts and/or treasurer’s reports; payments made in cash rather than by check; missed meetings; and unanswered phone calls or mail. However, these are merely signs, not proof of wrongdoing, so be discreet. DO NOT make any implicit, explicit, oral, or written statements or accusations. Such actions could result in a lawsuit for libel or slander.
Alert your PTA council or district president. Keep them informed; seek advice, assistance, and direction. The PTA district president will notify the vice president for leadership services or the treasurer of the California State PTA.
The council or district president will inform a unit on the proper procedure to take. This will include a special meeting of the executive board. (All information discussed is CONFIDENTIAL.)
If an audit is authorized, obtain a written report from the auditor, and call a second special meeting of the executive board and the principal to review the audit findings. Evaluate the audit findings to determine if it indicates carelessness or inaccurate or improper record keeping or the more serious matter of unaccounted funds.
If the results of the audit indicate that money is missing from the account, the executive board shall notify the PTA district or council president immediately, and file a complaint with the local law enforcement agency or district attorney’s office requesting an investigation. DO NOT make a direct accusation unless so instructed by the district attorney’s office.
To avoid mismanagement of funds/embezzlement and to protect PTA funds, ALWAYS follow correct financial procedures.
-------From Advanced Leadership Tools (1/03)
Workers' Compensation Insurance Rates Will Increase For Some PTAs
The California State PTA requires that all PTAs participate in the California State PTA insurance program. The mandatory insurance provides coverage for General Liability, Directors and Officers protection, Bonding and Workers' Compensation.
Workers' Compensation insurance costs have increased dramatically the past few years for all businesses in California. The California State PTA has absorbed these increases to premiums for all PTAs who have incurred payroll for several years, but this policy has become cost prohibitive. In order to meet the rising cost of premiums, and in an effort to fairly distribute the burden of the increased expense, changes must be made. All PTAs reporting no more than $1,000 in gross payroll will continue to be covered by the same base premium and no additional fee will be charged.
Only PTAs with gross wages in excess of $1,000 will incur an additional premium. To calculate the new premium: subtract $1,000 from the total (gross) payroll for all individuals paid for the period being reported; multiply the balance remaining by 5% and forward that amount along with your base premium through channels to the California State PTA
For example: $2,500 gross payroll, less $1,000 = $1,500 balance; $1,500 x 5% = $75.00. Premium for this PTA: Base premium + 5% = New premium. If we had used this formula in 2004 * 2005, the insurance premium for this example PTA would have been: $207 + $75 = $282.00.
This policy is effective retroactively as of January 5, 2005 through January 5, 2006.
How can your PTA avoid paying an additional premium? Do NOT hire or make payments directly to an individual. If the PTA membership votes to support a program that requires payments to individuals in any capacity, ask your school district to employ and pay that person, and gift the funds to your district for the expense. This not only reduces your cost to support programs, it offers an additional layer of protection for liability and removes your responsibility for filing government required employee reporting forms and payroll withholding. If the school district pays the individual with monies gifted from a PTA, you do NOT have to report this activity on the Workers' Compensation Report.